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The U.S.-Panama Trade Promotion Agreement eliminates tariffs and other
barriers on most U.S. goods, increasing export opportunities for agricultural
products important to Washington. With immediate elimination of duties on over
60 percent of current U.S. trade, this agreement changes the one-way street of
duty-free access currently enjoyed by most Panamanian exports into a two-way
street benefiting both countries. The American Farm Bureau strongly supports the
agreement, predicting widespread gains for U.S. agriculture exceeding $190
million per year.
Washington’s exports to all countries, estimated at $2.2 billion in 2006,
supported about 26,400 jobs, on and off the farm. These export sales make an
important contribution to the Washington farm economy which had total cash
receipts of $6.1 billion in 2006.
Fruits. Washington fruit growers and processors are the second largest
exporter nationwide with shipments valued at $833 million in 2006. Apples are
the largest agricultural industry in the state with cash receipts of $1.4 billion in 2006. This industry, which also grows pears, cherries, grapes,
raspberries and other fruit, will benefit from this agreement.
Panama will eliminate its tariffs on nearly all fresh and processed
fruits immediately.
Following are examples of fruit products of importance for Washington
that will be duty-free immediately (the currently applied tariff is
indicated in parentheses): apples (2 percent), pears (5 percent), grapes
(Free), fresh cherries (1 percent), raspberries (15 percent), processed
pears and cherries (Free).
Vegetables. Washington vegetable growers and processors are the second
largest exporter nationwide with shipments valued at $413 million in 2006.
Potatoes were the fifth largest agricultural industry in the state with cash
receipts of $498 million in 2006. This industry, which also grows asparagus,
sweet corn and other vegetables, will benefit from this agreement.
Panama will eliminate its tariffs on nearly all frozen and processed
vegetables immediately. The tariff faced by U.S. exporters for these
products currently is 15 percent.
The tariffs for most fresh vegetables will be eliminated in 10-15 years.
Panama will provide immediate duty-free access within a preferential
tariff-rate quota (TRQ) for frozen precooked French fries that starts at
3,640 tons and grows each year by 4 percent. The 20-percent over-quota
tariff will be eliminated in 5 years.
Panama will eliminate its 15-percent tariff on potato chips immediately
and the tariffs on potato flakes (15 percent) and other potato preparations
(as high as 54 percent) will be phased out in 5 to 10 years. Panama will
also establish a 765-ton duty-free preferential TRQ for fresh potatoes that
will grow each year by 2 percent.
Panama will eliminate its 15-percent tariffs on frozen and canned
sweetcorn immediately.
Dairy Products. The dairy industry is the second largest source of farm
cash receipts in the state with earnings of $686 million in 2006. Washington’s
dairy industry will benefit from the Panama FTA.
U.S. exporters will have immediate duty-free access to nine preferential
dairy TRQs with a combined total of 3,986 tons. These include 2,625 tons of
skim milk powder, 728 tons of cheese, 263 tons of ice cream, and 370 tons of
other dairy products. These quantities will grow by 4 or 5 percent each year
and the over-quota tariffs for these TRQs, which range from 15 percent for
ice cream to 50 percent for milk powders, will be phased out in 15 to 17
years.
U.S. dairy exporters will continue to have access to the global TRQs for
3,830 tons of milk powder and 3,782 tons of cheese that are part of Panama’s
World Trade Organization commitments.
Panama will eliminate its 30-percent tariff on dried whey products
immediately. The tariffs on most other dairy products, which currently face
duties as high as 140 percent, will be phased out over 15 years.
In addition, Panama has already implemented our December 2006 bilateral
agreement on sanitary and phytosanitary (SPS) measures and technical
standards by recognizing the equivalence of the U.S. food safety systems for
processed foods, including dairy products, and by streamlining its product
registration system for packaged foods. This will allow U.S. food processors
to export dairy products to Panama without burdensome paper work and without
having each facility and shipment inspected by Panamanian authorities.
The National Milk Producers Association supports the Agreement, noting
that "Panama imports nearly half its dairy products, and the U.S. stands to
become a larger supplier once the FTA is finalized."
Beef. The cattle and calf industry is the third largest source of farm
cash receipts with earnings of $649 million in 2006. The industry will benefit
from this agreement.
Panama will immediately eliminate its 30-percent duty on beef products
of most importance to the U.S. beef industry--prime and choice cuts.
Panama’s tariffs on other cuts of beef will be phased out over 15 years.
The 10-percent tariff on beef tongues and livers will be eliminated in 5
years, and the 15-percent tariffs on other edible offal will be eliminated
immediately.
Panama has already implemented our December 2006 bilateral agreement on
SPS measures, reopening its market to U.S. beef by bringing its import
requirements related to BSE into compliance with international standards.
Panama also accepted the equivalence of the U.S. meat inspection system,
which allows U.S. inspectors to certify beef for export to Panama without
having each facility and shipment inspected by Panamanian authorities.
Wheat. Wheat is the state’s fourth largest agricultural industry, and
Washington is the nation’s fourth largest wheat exporter with overseas shipments
of wheat and wheat products estimated at $314 million in 2006. Washington’s
wheat growers will benefit from the Panama agreement.
Panama’s current zero-tariff treatment for wheat will be locked in place
immediately upon implementation of the Agreement.
The 10-percent tariff on wheat flour will be eliminated within 12 years.
Back to the
U.S.–Panama Trade
Promotion Agreement
